The folly of foreign exchange intervention
It has seldom been clear what purpose foreign exchange intervention is really intended to achieve. When he was an under-secretary in the US Treasury, Beryl Sprinkel, testifying before Congress, observed that the administration ordered there to be intervention in the foreign exchange market for the dollar when the market was disorderly; and when asked what the symptoms of disorder were, replied that they were when there was official intervention.
Short-term disorder in the foreign exchange market
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